Technical analysis for FTSE 100 for 9th October 2023
Risk sentiment took a hit as oil surged as much as 5% after Hamas’ surprise attack on Israel triggered fears of a supply shock. Gold gained along with the dollar on haven bids.
West Texas Intermediate climbed above $86 a barrel while Brent touched $89 as traders braced for a wider conflict after the US said it was sending warships to the region. The Wall Street Journal reported that Iranian security officials helped Hamas plan its attack on Israel, which risks triggering a retaliation against Tehran.
U.S. stock futures slid on Monday as the military conflict in the Middle East lifted oil and Treasuries, while the sizzling September U.S. jobs report raised the rate stakes for inflation figures later in the week. Holidays in Japan and South Korea made for thin conditions but the initial bid was for bonds and the safe harbours of Japanese yen and gold, while oil prices climbed by more than $3 a barrel.
Israel pounded the Palestinian enclave of Gaza on Sunday, killing hundreds of people in retaliation for one of the bloodiest attacks in its history when Islamist group Hamas killed 700 Israelis and abducted dozens more.
Any sustained rally in oil prices would act as a tax on consumers and add to inflationary pressures, which weighed on equities as S&P 500 futures shed 0.8% and Nasdaq futures lost 0.7%.
The strength of the U.S. jobs report had fed expectations that interest rates would have to stay high for longer, with another major test looming from data on September consumer prices.
Median forecasts are for a 0.3% gain in both the headline and core measures, which should see the annual pace of inflation slow a touch.
FTSE 100 technical analysis for today, 9th October 2023
Well this could be an interesting one today given the backdrop.... best thing to do is trade what you see and focus on the technicals which are pointing to a bull Monday! The bulls will certainly be keen to build on Fridays strength and for the FTSE 100 a rise towards the 7535 level once again looks likely to start with.
The 2h chart remains bullish to start with, with support at 7435 setting up a decent 100 point range. We also have the 25ema on the daily with resistance at 7535.
The bulls will be keen to defend any drop down to the pivot at 7492 and also defend the 7500 level, and then below that we have the 7452 S1 level. I am thinking that the US will try and push this higher today as well in a show of strength and as such, that should pull the FTSE 100 up with it.
It's worth noting that the 10d Raff channel is heading down though and the top of that channel is at 7574 and around the R1 level. So a break above 7535 would likely see a test of this level and then a subsequent drop. 7551 is also the 200ema on the daily.
If the bears were to break below 7435 then the next daily support level of note is at 7385. That feels a bit too pessimistic though for today given where we are opening (just above 7500) and I would prefer to see the bulls quick out the blocks today!
In the unlikely event of a break above the 7575 level then 7603 is R2 and being the round number too then we should see a reaction here and it would be worth a short. 7674 above that!
The market sentiment also remains in the "fear" stage, a bit more positive than the "extreme fear" of last week.
So, generally looking like a bit of a bull Monday and keep an eye on the key levels mentioned for reactions.
Good luck today.
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